WTI Crude Halts Four-Day Drop Before U.S. Confidence Data

May 28 (Bloomberg) -- Brent crude advanced to its highest
in a week, and West Texas Intermediate snapped a four-day drop,
before the release of consumer confidence and housing data in
the U.S., the world’s largest consumer of the commodity.

Brent gained as much as 1.7 percent in London amid
forecasts that the Conference Board’s index of consumer
sentiment, to be released today, probably climbed this month to
its highest level since November. WTI slid as much as 1 percent
earlier after the energy minister for the United Arab Emirates
said global oil demand will stay “relatively weak.” OPEC is
forecast to keep its supply target unchanged on May 31.

“The U.S. recovery is advancing, rather than
accelerating,” said Guy Wolf, global head of market analytics
at Marex Spectron Group in London. “On a relative basis, the
U.S. remains the best growth spot of the major economies, but on
an absolute basis things are not great.”

Brent for July settlement rose as much as $1.78 to $104.40
a barrel on the ICE Futures Europe exchange, the highest
intraday level since May 21. The European benchmark grade was at
a premium of $9.17 to WTI. The spread was $8.85 a barrel
yesterday, the widest based on closing prices since May 15.

WTI for July delivery rose as much as $1.07, or 1.1
percent, to $95.22 a barrel and was at $95.18 in electronic
trading on the New York Mercantile Exchange as of 1:04 p.m.
London time. Floor trading was closed yesterday because of the
Memorial Day holiday, and yesterday’s transactions will be
booked with today’s trades for settlement purposes. Prices are
up 1.8 percent this month after a 3.9 percent loss in April.

Suitable Prices

Current prices are “suitable and fair,” said the U.A.E.’s
Suhail Mohammed Al Mazrouei, according to the official WAM news
agency. Global oil consumption this year will be about 800,000
barrels a day more than in 2012, Al Mazrouei said yesterday.
OPEC, which supplies about 40 percent of the world’s oil needs,
is producing 30.4 million barrels a day. That’s “only little
above the organization’s target, and this reflects the demand,”
he said.

WTI has technical support along its middle Bollinger Band
on the weekly chart, according to data compiled by Bloomberg.
This indicator, at around $92.35 a barrel today, is close to
where futures halted declines the past two weeks. Buy orders
tend to be clustered near chart-support levels.

Hedge Funds

Hedge funds and other money managers raised bullish bets on
Brent by 16,460 contracts in the week ended May 21, according to
data from ICE Futures Europe.

Speculative bets that prices will rise, in futures and
options combined, outnumbered short positions by 146,679 lots,
ICE said yesterday in its weekly Commitment of Traders report.
The increase marks the fourth weekly gain and brings the level
for net-long positions to the highest since the week to Feb. 26.

The Conference Board’s index of U.S. consumer sentiment
probably climbed to 71 this month from 68.1 in April, according
to the median estimate of economists surveyed by Bloomberg News
before the New York-based private research group releases the
data today.

The S&P/Case-Shiller index of property values in 20 U.S.
cities rose 1 percent in March after a 1.2 percent gain the
prior month, economists predicted in a Bloomberg survey. That
would put home prices up 10.2 percent from a year earlier, the
biggest jump since April 2006.